Stormwater proposal sees opposition

A legislative issue that has slipped by largely unnoticed in the business community and would affect municipalities, homebuilders, retailers and manufacturers, has caused a riff over who should foot the bill.

Senate Bill 3053 would authorize the creation of stormwater management districts within the state. Its counterpart, House Bill 1511, that would have created drainage districts and imposed taxes or fees on manufacturers, retailers, homebuilders and others, died on the calendar March 16.

“The House bill is dead, but the Senate bill is still alive,” said Mark Leggett, director of government affairs for the Mississippi Manufacturers Association, an 1,800-member organization. “All the taxing provisions were removed from the Senate bill, but (state) senator Alan Nunnelee said he wanted the parties to work together over the summer to discuss funding. So, even if the taxing provisions are not alive in the legislation, this will be a topic of discussion all year among the parties involved.”

Both bills originally gave stormwater districts the authority to levy any of four types of taxes or fees to pay for the improvements. At least 31 more Mississippi municipalities would be required to have stormwater permits from the Department of Environmental Quality under the Environmental Protection Agency’s Stormwater Phase II regulations. The options include:

• Four mills on property;

• Quarter-cent sales tax;

• Special assessment on property;

• Fee based upon property’s impervious area (roof and parking lot).

Last summer, the Legislature appointed an interim committee to discuss the issuance of Phase II stormwater regulations and its impact on local governments. At the time, it was not considered to have an impact on industry and the DEQ’s Web page even listed a statement that said, “A main feature is that all industrial facilities that can certify that they have no exposure to stormwater do not need to apply for coverage.”

“When the House bill came out, I was surprised to learn that we would be expected to pay a substantial portion of the cost,” said Leggett. “Manufacturers have been covered by Phase I of the stormwater regulations since 1990. During that decade they have spent millions to comply with the law to ensure that the runoff leaving their plant sites is not carrying pollutants. This bill would make manufacturers pay a second, and some a third time, for a regulation with which they are in compliance. As one medium-sized manufacturer told me, ‘We’ve spent $100,000 complying with these regulations; I think we have done our part.’”

Samantha Steeber, special projects coordinator for the Mississippi Municipal League, who was on the interim committee, said several ways of financing stormwater districts were discussed to pay for the unfunded federal mandate.

“Those municipalities that do not comply by the deadline date of March 10, 2002, face fines of up to $27,500 per day per violation,” Steeber said. “Given that, municipalities on this list are horribly worried that when it comes time to have all mandates in place, they won’t have money to do it. If they don’t, there are groups waiting to sue. When Phase I was put into place and cities were not able to comply for the same reason, the Sierra Club and several other groups sued immediately. Cities have no recourse when that happens.”

“If we are required to do something as a community, there must be a way to pay for it. One option, and that’s all it was, was to spread the cost to affected areas rather than making the cities burden everyone in the city with a higher tax rate. We asked to have sales tax removed, because we know that’s quite unfair since it hits people who are not living in the particular districts. We asked to have bonding limits removed so that if a bond was generated, it could cover the actual cost rather than a token attempt to correct the situation. We thought it was a pretty good solution to allow payment by the people affected,” she said.

Without a funding mechanism, municipalities have only one recourse — ad valorem taxes, Steeber said.

“We can’t go out and sell products, generate new taxes or impose local option taxes,” she said. “If you have to raise money, you have to tax at the city or county level and the argument of double taxation will be an issue.”

Jeanie E. Smith, executive director of MML, said the bill will “probably go through the Senate and House with no funding, which is a concern, but hopefully we’ll get that worked out next year.”

“There seems to be a view that the municipalities are a fountain of gold coins,” she said. “In reality, everything a municipality does has to have a resource available to spend money.”

More than 1,500 manufacturers in the state have stormwater permits, a stormwater pollution prevention plan and have already paid to comply with stormwater Phase I, Leggett said.

When EPA administrator Carol Browner released the regulations in October, the purpose of Phase II was “to reduce environmental harm by stormwater discharges from many point sources of stormwater currently unregulated,” Leggett said.

“The focus is on municipal storm sewer systems and construction activity,” said Leggett. “Ms. Browner said these could be done with existing municipal programs. EPA does say there will be costs, they estimate, rather generously, about $9 per household.”

The EPA is requiring the following six minimum control measures:

• Public education and outreach;

• Public participation and involvement;

• Detection and elimination of illicit discharges;

• Controlling construction site runoff;

• Controlling post-construction site runoff; and

• Good housekeeping to prevent pollution by municipal operations.

“We recognize this is another unfunded mandate forced on state and local governments,” Leggett said. “I understand this bill is modeled on existing law that created the solid waste districts that handle garbage disposal, but this seems to be overkill. This legislation sets up another layer of government, imposes new taxes and gives authority for local regulations that could duplicate those imposed by DEQ.”

Despite the progress made since the passage of the Clean Water Act (CWA), degraded waterbodies still exist. A leading source of this contamination is polluted runoff. Under the CWA, Phase I of the U.S. EPA’s stormwater program relies on the National Pollutant Discharge Elimination System permit coverage to address stormwater runoff from medium and large municipal separate storm sewer systems (MS4s) serving populated areas of 100,000 or more, construction activity disturbing five acres of land or more, and 10 categories of industrial activity. Phase II, the next step in EPA’s effort to preserve, protect and improve the nation’s water resources from polluted stormwater runoff, would expand the plan by requiring additional operators of MS4s in urbanized areas and operators of small construction sites.

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